India’s foreign exchange reserves decline for third week in a row

Mumbai: India’s foreign exchange reserves declined for a third consecutive week.  Forex reserves fell  by $2.16 billion to $688.26 billion during the week ended October 18. With this, India’s forex reserves have fallen by a total of $16.61 billion in three weeks. The Weekly Statistical Supplement released by the Reserve Bank of India (RBI) revealed this.

However, the fall in forex reserves during the latest week is the lowest in three weeks. In the previous week, the country’s forex kitty had dropped by $10.746 billion. In the week before that, it had fallen by $3.709 billion. In the week ended on September 27, the reserves had jumped by $12.588 billion to an all-time high of $704.885 billion. In the previous week ended September 20, the forex reserves jumped by $2.8 billion to $692.3.

India’s forex reserves jumped $223 million to a fresh all-time high of $689.458 billion for the week ended September 13. The forex kitty had jumped by $5.248 billion to a record $689.235 billion for the previous reporting week. In nearly a month between August 9 and September 13, India’s foreign exchange rose by 2.88 per cent from $670.119 billion to $689.458.

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Forex reserves, or foreign exchange reserves (FX reserves), are assets that are held by a nation’s central bank or monetary authority. It is generally held in reserve currencies, usually the US Dollar and, to a lesser degree, the Euro, Japanese Yen, and Pound Sterling.

The foreign exchange reserves of the country comprise of foreign currency assets (FCAs), gold reserves, special drawing rights (SDRs) and the country’s reserve position with the International Monetary Fund (IMF). FCA is the largest component of the forex reserves. It includes the effect of appreciation or depreciation of non-US currencies like the euro, pound, and yen held in the foreign exchange reserves.

For the week ended October 18, foreign currency assets, decreased by $3.865 billion to $598.236 billion. Gold reserves increased by $1.786 million to $67.444 billion during the week. The special drawing rights (SDRs) were down by $68 million to $18.271 billion. The reserve position with the IMF was also down by $16 million to $4.316 billion in the reporting week